Tuesday, August 23, 2005

Boon or Boondoggle?

Federal auditors are taking aim at an Agriculture department program that pays farmers for easements to protect wetlands. The Sacramento Bee reports that while farmers love the payments and environmentalists love the results, the auditors are questioning whether the taxpayers are being overcharged."Since its modest beginnings in the 1990 farm bill, the federal program has helped protect 1.4 million acres nationwide, including more than 70,000 acres in California. The federal funds, for instance, have helped restore wetlands on the 600-acre Lonetree Ranch in Merced County, the 640-acre Pryse Farms site in Tulare County and the 232-acre L&L Farms site in San Joaquin County. Sacramento Valley rice farmers and environmental advocacy groups, in particular, have been big fans."It's been a success in that we've been able to help landowners convert marginal land into wetlands," Dennis Orthmeyer, wetlands program director for the Sacramento-based California Waterfowl Association, said Friday."But, hold on there say the auditors...This month, the Agriculture Department's Office of Inspector General bluntly critiqued the program in a 71-page report that's laden with auditor-speak. "(Agriculture Department) controls are not currently adequate to ensure that its easement valuation process operates effectively, efficiently and in compliance with applicable laws and regulations," auditors warned.Specifically, the auditors singled out the Agriculture Department's California offices for "significant valuation deficiencies" that cost taxpayers money.Over the past five years, auditors say, Wetlands Reserve Program problems nationwide cost taxpayers an estimated $159 million in unwarranted payments. Auditors say Agriculture Department officials weren't well-qualified to assess real estate. Rules have been misinterpreted, benefiting farmers. Farmers have collected both crop subsidies and wetlands reserve funding for the same land.Agriculture department officials defend the program, but conceed the controls need to be tighter. As is usually the case with easements, the problem is how to value them.How land gets valued is one big problem, with Knight citing a past "difference of opinion" between auditors and his agency. Until now, farmers have received the fair agricultural value of the land being protected. Auditors, however, say this is too much because it ignores the "residual value," which covers other uses such as hunting still possible on the land.In California, for instance, farmers were paid an average of $2,000 an acre. Auditors contend the protected land retained an average residual value of up to $1,500 an acre. In other cases, farmers have double-dipped, by collecting wetlands funds for land that's also used in fixing crop subsidy payments.In seven California farms reviewed by the auditors, growers received a total of $838,448 in crop subsidies for land that also drew wetlands reserve funding. Since the seven farms amounted to a big percentage of the 17 California farms included in the overall review, auditors further warned that the statewide problem might be much costlier."Stand by for more bad news about easements.